Gensol Engineering: Shares Drop By Over 5% to Set a New 52-Week Low Today

Recent stock performance

The stock of Gensol Engineering had fallen 39.7% in the past five days. It is down 64.1 percent in the past six months and down 56.3 percent in 2025 so far. The stock's 52-week high was ₹ 1,125.7 on June 24, 2024 and its 52-week low is ₹307.2 today, i.e., March 7, 2025.

Partial Recovery, Yet Collapse

The price of Gensol Engineering Ltd's share crashed by close to 40% in three trading sessions. This steep fall was accompanied by a slight recovery of more than 5% on Friday, despite the stock trading at ₹344, up 2.90% in early trades on March 7, 2025, the share price of the company has tanked by 5.53%. The share price of the company is trading at ₹316.70 at 11:45 AM. At one point during the day, Shares rebounded 15%, or reached ₹352.95, recovering from an all-time low. The bounce leaves the stock 32% lower over the past four sessions.

Triggering Factor: Downgrades in credit ratings

The major trigger which led to such sharp devaluation was a rating downgrade by CARE Ratings. CARE Ratings had also downgraded the company’s long-term bank facilities to CARE D from CARE BB+; Stable while rating its short-term bank facilities CARE A4+. ICRA too has downgraded its credit rating on Gensol Engineering. Lenders in talking to the company attributed these downgrades to delays in servicing of term loan obligations. Their action was in accordance with their policy on recognition of defaults because of these continuing delays, CARE Ratings said in a release.

More Pressure: Resignation of CFO

In another disappointing news, the board of Gensol Engineering has approved the resignation of its Chief Financial Officer (CFO) Ankit Jain, with effect from March 6, 2025. This resignation came at a time when the company was already under fire for its ability to service its debt and for allegedly falsifying debt servicing documents. The company subsequently appointed Jabir Mehndi Mohammed Raza Aga as its new chief financial officer.

Investor Fears and Stock Performance

The downgrades in rating and the departure of the CFO sparked major investor worries about the company’s financial health and its ability to service the debt. That was evident with the stock hitting lower circuit on Thursday, and declines on both Wednesday and Tuesday. On BSE, the stock even slipped to a new 52-week low of ₹335.35. The company’s market cap also fell to ₹ 1,274.41 crore. This means the stock has dipped by a heavy 66.02% in the past year.

Companies’ Responses and Other Mitigation Strategies

Gensol Engineering has explained the downgrades were due to temporary liquidity mismatch which is getting resolved through customer payments. The company said it was not involved in any “falsification claims” and that it was establishing a committee to examine the issue, asserting its commitment to accountability and transparency. Gensol plans asset Divestments to reduce its debt, which stands at ₹1,146 crore as compared to reserves of ₹589 crore (Debt-equity ratio 1.95). These include the sale of electric vehicles worth ₹315 crore (2,997 units) and divestment of a wholly-owned subsidiary for ₹350 crore, which will help to bring down ₹665 crore of debt and reduce the debt-equity ratio to 0.8. It also said it has already repaid ₹230 crore of past debt obligation during the current financial year.

Financial Health Summary and Forward-Looking Guidance

Gensol Engineering also pointed to the quality of its balance sheet with an order booked of more than ₹7,000 crore, revenue growth of 42% to ₹1,056 crore in the first nine months of FY23, an 89% increase in EBITDA to ₹246 crore and 34% growth in profit to ₹67 crore as evidence of its resilience in the face of painful adjustments. Gensol Engineering, founded in 2012, is a leading provider of EPC services to solar energy projects as well as an electric vehicle leasing company. The company still sees long-term growth ahead for its business.

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